Socimi Testa Residencial and Acciona’s property rental business have merged to form a new property ‘giant’ in a deal worth an estimate €341 million.

Acciona will merge its portfolio of 1,058 rented homes in Testa in exchange for shares in the company; an equivalent to 21% of its capital. The group will become the third biggest shareholder in the new socimi, after Santander (38.8%) and BBVA (26.9%); property development company Merlin will see its stake diluted to 12.7%.

Once the deal has gone through, Testa Residencial will have a total of 9,041 rental homes in its portfolio. The properties are distributed between 118 buildings with a valued of €1,816 billion. Each year, the company will generate €70 million from renting out its portfolio of apartments, 51% of which are located in the region of Madrid.

The merger could not have come at a better time as Spain’s rental market is booming. Average rental prices for new leases have grown by 20.9% over the last year, according to industry leader, Idealista. The transaction will create a new property giant within the rentals sector, given it will be the first socimi dedicated to residential property lettings.